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CHICAGO-An $8-million loan against the Bricktown Square shopping center in the Belmont-Cragin neighborhood on the city’s Northwest Side will be written down to $1 million under an ordinance being considered by the city council. The city agrees with Bingham Farms, MI-based Malan Realty Investors, Inc. that the 306,000-sf shopping center is worth about $12 million less than the city’s junior mortgage and a first mortgage.

Malan Realty Investors is in the process of liquidating, and has its entire 5.5-million-sf portfolio on the market. The Bricktown Square shopping center, on 26 acres at the northwest corner of Fullerton and Narragansett avenues, is one of 15 properties under contract, according to the REIT, for $94 million. The properties under contract also include three 96,268-sf Kmart stores in Chicago and the suburbs of Franklin Park and Lansing.

The city concedes Bricktown Square is worth about $22 million, $5 million less than the first mortgage on the property. Passage of an ordinance by the city council will settle an Urban Development Action Grant loan, which Malan Realty Investors has defaulted on payments, for $1 million.

Bricktown Square was built in 1987 and renovated two years later, according to Malan Realty Investors. The shopping center was most recently 94% leased, with Toys ‘R’ Us, Kids ‘R’ Us, Marshall’s, Sportmart, Frank’s Nursery and Capital Fitness the anchor tenants. While Sportmart’s lease expires next year, Marshall’s is the next to come due for renewal in 2005, with the retailer holding options through 2015.

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